Hong Kong’s IT equipment (computer and parts) imports in 2013 dropped 2.2 percent to US$51 billion. The value of U.S. IT equipment exports to Hong Kong in 2013 was US$1.69 billion, a 17.5 percent decrease over 2012, representing 3.3 percent of Hong Kong’s total IT imports. China is the largest export market for Hong Kong’s IT equipment, absorbing over two-thirds of the total exports. The decrease in imports/exports of ICT products in 2013 was clearly reflected as a result of China’s slow-down in demand.

Although there are no official statistics on software and IT service, Business Monitor International (BMI) estimated Hong Kong’s software and IT services spending in 2013 at US$1.4 billion and US$1.8 billion, respectively.

Hong Kong’s total IT spending reached $5.8 billion in 2013. Computer hardware, software and service sales recorded were $2.6 billion; $1.4 billion; and $1.8 billion, respectively. BMI forecasts IT spending in Hong Kong will reach $6.1 billion in 2014, representing a growth of 6.3 percent from 2013.

The Hong Kong retail hardware market is one of the most developed globally. There is high penetration of traditional PCs, high levels of multiple device ownership and high penetration of tablets. Given this maturity, Hong Kong could prove a testing ground for hardware market dynamics over the medium term. BMI expects the stabilization of desktop and notebook volume will begin in 2014 as they approach the replacement baseline, while they are also forecasting a slowdown in tablet volumes.

In contrast to the slowdown in the hardware market, growth of the cloud computing market in Hong Kong remains strong as a leading center for cloud computing in Asia. Hong Kong is home to a booming domestic market, including for more deployments such as disaster recovery and testing/development, as well as assuming a prominent role as a regional cloud computing center. Government incentives and Hong Kong’s position in the region has attracted investment from global industry leaders such as NTT Communications, Savvis, IBM and Rackspace. BMI expects further investment from major global infrastructure-as-a-Service and Platform-as-a-Service providers looking to tap into the growth trend and expand their presence in Hong Kong.

Although Hong Kong is a relatively small market for U.S. IT exports, U.S. companies should consider Hong Kong as a gateway to the Mainland China market. About 66 percent of IT exports, totaling US$35.9 billion, went to China.